Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/48289

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DC Field

Value

Language

dc.contributor.author

Cheung, Diana

en_US

dc.contributor.author

Padieu, Ysaline

en_US

dc.date.accessioned

2011-07-15T14:20:25Z

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dc.date.available

2011-07-15T14:20:25Z; end=2011-11-16

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dc.date.issued

2011

en_US

dc.identifier.uri

http://hdl.handle.net/10419/48289

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dc.description.abstract

By reducing risk on income, health insurance may reduce household precautionary behaviours and boost consumption. This paper evaluates the impact of a subsidized public health insurance scheme designed for rural residents, the New Cooperative Medical Scheme (NCMS), on consumption and saving behaviours in rural China. To do so, we use socioeconomic and demographic data from the China Health and Nutrition Survey and implement OLS, IV and Propensity Score Matching. We find that NCMS helps lowering household savings by enhancing total consumption expenditures, in particular food consumption and bride expenses with OLS and IV estimations. However, when we implement a propensity score matching coupled with a difference-in-difference approach to control for time-invariant unobservables, these results no longer hold. Thus, the scheme does not have a disincentive effect on savings nor an incentive effect on consumption, suggesting that the implementation of the insurance is too recent in 2006 to be trusted by rural Chinese households, to reduce income risk and enable them to lower their precautionary savings.